Jan

4

An outstanding Op-Ed piece titled "Uncertainty and the Slow Recovery" by Becker, Davis & Murphy, in today's WSJ, argues that political/economic uncertainty is a major cause of the slow rate of recovery from the Great Recession. This is highly reminiscent of the prolonging effect of the New Deal on the Great Depression, when business uncertainty resulting from seemingly arbitrary government action caused economic malaise to linger for years.


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  1. Steve on January 5, 2010 10:32 am

    I would like the more brilliant to weigh in here.

    How does one have a jobless recovery. I argue this is a canard. There is no such thing. How can we run at 10%unemployment and grow the economy. Help me out here but Keynes advised FDR that to restart the economy in 32 jobs must be created. This is what started the great public works programs and jobs followed. People ultimately need money to spend. Cash for clunkers and stimulus packages are band-aids ultimately people must have the security of a job. As we know the public works were funded by greatly expanding printing of money and nothing is free forever. Eventually the piper would have to have been paid and had it not been for the war who knows where the country would have landed.

    This administration is focused on a health care package and I do not see one thing about jobs creation. Money for the private sector is thin as banks would rather play the spread than lend it out.

    My thesis is that the chicken and the egg formula is as follows. Banks come to the forefront and lend out money to the private sector. This allows them to make payrolls by using commercial paper once again. Then they can hire workers who will then have money to spend on food, clothing, housing etc.

    A short synopsis, but one man’s view. Of course a socialist will take a different view. I prefer Reaganomics and supply side economics. It seems so basic. Prove me wrong.

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